London first-time buyers must muster £250K deposits

Buyers in London will need to make a downpayment of almost a quarter of a million pounds to buy their first home in 2027, according to London & Country.

The mortgage advice firm has revealed the average deposit for first-time buyers in the capital is set to jump by 75 per cent on the current figure to reach an eye-watering £244,842 in just 10 years' time.

On a UK-wide basis, those looking to take their first step on the housing ladder will need to stump up £81,468 by 2027 – a 57 per cent climb on today's figure.

Yet despite the pressing need for would-be first-time buyers to start saving, almost a quarter (24 per cent) of those surveyed said they had not set aside a penny towards their deposit.

Those looking to buy within the next 10 years significantly underestimated the amount of money they would require, believing they would need just £35,402 on average for a deposit – almost half the amount currently needed.

The figures highlight the scale of the challenge facing policymakers as they look to tackle the growing affordability crisis in the property market.

David Hollingworth, associate director for communications at London & Country, described the challenge faced by first-time buyers in the capital as “alarming”.

He said: "It makes sense for first-time buyers to try and raise as big a deposit as possible, but that is very much easier said than done in today’s current climate.

"Although there are mortgage deals available to as much as 95 per cent of the property price, rates on these types of deals will be higher than for those who have saved a larger deposit.

"Given the level of commitment that first-time buyers are having to make it is of little surprise that they are often electing to fix their mortgage rate, so they know where they stand with their mortgage payments."

According to the research, first-time buyers expect 44 per cent of their deposit to come from their own cash savings, with a further 15 per cent coming from a Help to Buy Isa and 6 per cent coming from a Lifetime Isa.

A further 11 per cent is expected to come from a sum from parents or other family members, and 6 per cent will come from an inheritance.

The findings are based on a survey of 4,006 UK adults, including 620 who are planning on buying their first home in the next 10 years, by Opinium Research between 22 and 26 September.